Auto insurers have been writing off crashed Tesla EVs and sending them to salvage auctions instead, deeming many too expensive to repair.

During Tesla’s earnings call for the fourth quarter of 2022, its chief executive Elon Musk said that third-party insurance companies’ premiums for Tesla’s vehicles had become ‘unreasonably high’ in some cases. The company’s own insurance arm was putting pressure on those insurance carriers by now offering significantly lower rates to Tesla EV owners.

At the same time, Musk said Tesla was continuing to work on design and software changes to its electric vehicles that would lower repair costs and insurance premiums in general, Reuters first reported.

"We want to minimize the cost of repairing a Tesla if it’s in a collision," he said.

Despite the tag price on their repair, Tesla’s electric vehicles have enjoyed consistently high demand, which Musk described as well ahead of Tesla’s ability to produce them.